Holtby, 22, had already agreed a deal to move to White Hart Lane from Schalke in the summer at the end of his contract but the move has been brought forward in a £1.5million deal and the Germany international could make his Barclays Premier League debut as early as Wednesday night when Spurs visit Norwich.
"We rate the player very highly," said Villas-Boas. "We managed to get him at a good price, it was always a question of how much Schalke would want for the player. I think there was willingness from the player to come early so we have decided to add him to the squad - he is an extremely talented attacking midfielder who can play in a variety of roles."
Villas-Boas has two strikers at the club in Defoe and Emmanuel Adebayor but Defoe suffered an injury that ruled him out of the FA Cup defeat at Leeds and Adebayor is away at the African Nations Cup with Togo.
Villas-Boas added: "He is used to playing in different positions, he is young and talented - I think he is an excellent addition for us.
"He has been selected for the game (at Norwich) - he has just had one training session so we will decide wisely if it (playing) is appropriate or not."
There were reports that Defoe would require surgery after sitting out the Leeds game but Villas-Boas played that down and stressed he still does not feel he needs to make a move for a new forward in the window.
When asked if Defoe required an operation he said: "No, it is not true. It is extremely important (that Defoe can play), we have spoken openly about this situation and we know it is a situation of risk and limit but we are happy to take that risk at the moment. We are fine as we stand - it is something we are not considering."
One player who has been linked with Spurs, as well as with Wednesday's opponents Norwich, is Celtic striker Gary Hooper but Villas-Boas was quick to rule out a move for the former Scunthorpe player.
"I was never in Scotland seeing the player so I don't know where it came from," he said. "Obviously I think he is a player of massive talent but he was never mentioned to us."